The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, most commonly referred to as the OECD Anti-Bribery Convention, is a convention by the OECD aiming at establishing legally binding standards to criminalise bribery of foreign public officials in international business transactions and provides for a host of related measures that make this effective.[1] The convention is ratified by 34 OECD member countries and seven non-member countries (Argentina, Brazil, Bulgaria, Colombia, Latvia, Russia, and South Africa) as of May 21st 2014.[2]
Backgrounds and history
Before the signing of the OECD Anti-Bribery Convention in December 1997, only one government had made foreign bribery a crime. Most other governments had treated foreign bribe payments as legitimate business expenses for tax purposes, for instance in Germany under a tax law provision termed “useful payments”. Media reports and bureaucratical evidence indicate bribes being widely used on foreign officials to obtain governmental contracts, more favourable custom duties and creating favourable advantages towards competing corporations.[3] It is now universally recognized that foreign bribery distorts competition, undermines good governance, and hurts the most vulnerable. The convention was a breakthrough because it committed the world’s leading exporting countries to prohibit bribery, thereby aiming to turn off the spigot on the supply-side of global corruption. Since its commencement, all 41 parties of the convention have passed laws on making foreign bribery a criminal offense. However, enforcement of the laws remains uneven, with some parties making more of an effort in enforcing the laws than others. Despite this, over 300 companies and individuals have been sanctioned under criminal proceedings for foreign bribery as of December 2011.[4]
Implementation and enforcement
Since the OECD has no authority of enforcing the OECD Anti-Bribery Convention in its members' countries, the implementation and enforcement of the convention is carried through by the member countries, and monitored by the OECD Working Group on Bribery [5] through a rigorous peer-review monitoring system, which goes through three stages [6] :
Phase 1 valuates the adequacy of a country’s legislation to implement the Convention.
Phase 2 assesses whether a country is applying this legislation effectively.
Phase 3 focuses on enforcement of the Convention, the 2009 Anti-Bribery Recommendation, and outstanding recommendations from Phase 2.
Every member country must provide the OECD Working Group on Bribery with reports on the implementation and enforcement of the three different phases of the implementation of the convention. To ensure continuous enforcement against foreign bribery within member countries, all parties have also had to provide follow-up reports on the different phases of implementation of the convention. In these follow-up reports, all parties account for the concrete steps they have taken to eradicate foreign bribery within their span of responsibility.[7]
Finland
Finland was ratified by the OECD Anti-Bribery Convention on December 10th 1998 and entered into the force of the Convention as of February 15th 1999. Finland released their Phase 1 report in July 1999, their Phase 2 report in May 2002 and Phase 3 report in October 2010. The follow-up report on Phase 2 was released in March 2006 and the follow-up on Phase 3 in January 2013.
In addition to passing anti-bribery legislature, Finland has also signed and been ratified by the following relevant international instruments in their effort to implement and enforce the OECD Anti-Bribery Convention[8] :
- European Council Criminal Law Convention on Corruption
- European Council Civil Law Convention on Corruption
- Additional Protocol on the European Council Criminal Law Convention on Corruption;
- Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime
- United Nations Convention against Transnational Organised Crime
- United Nations Convention against Corruption
Critique
The OECD Anti-Bribery Convention has received critique for being "too narrow" in its focus on bribery as a crime. The specific focus of the Convention is only on the "supply side" of corruption, leaving the "demand side" out of the equation. For instance, if a German coffee importing company resorted to bribing a Cuban official in order to obtain favorable advantages with custom duties, the offence in question would - according to the convention - be only that of the German company, regardless of the actions of the Cuban official.[9]
In contrast to the other big anti-bribery document, the United Nations Convention against Corruption, the OECD Anti-Bribery convention does not address all parties involved in any given bribery case. The UN convention from 2003 has a broader approach: In addition to including the demand side of bribery, it also takes into account other aspects, such as money laundry, asset recovery, international assistance and corruption prevention.
Future challenges and necessary steps
Because the Convention is a collective commitment to eradicate foreign bribery by all the parties, lack of consistent enforcement endangers the success of the Convention. As mentioned, all parties have not been equally effective with implementing and enforcing laws in accordance with the convention, and the main challenges for the OECD Anti-Bribery Convention will continue to be the enforcement of the laws prohibiting all forms of bribery of foreign public officials in international business transactions. Facing these challenges successfully requires the following main steps:
1. Continuation of rigorous follow-up monitoring.
2. High level advocacy directed to the political leaders of the governments where there is still little or no enforcement.
3. Adoption of the Convention by other major exporters, in particular by the four remaining G20 states China, India, Indonesia and Saudi Arabia. [3]
Table of Contents
Backgrounds and history
Before the signing of the OECD Anti-Bribery Convention in December 1997, only one government had made foreign bribery a crime. Most other governments had treated foreign bribe payments as legitimate business expenses for tax purposes, for instance in Germany under a tax law provision termed “useful payments”. Media reports and bureaucratical evidence indicate bribes being widely used on foreign officials to obtain governmental contracts, more favourable custom duties and creating favourable advantages towards competing corporations.[3] It is now universally recognized that foreign bribery distorts competition, undermines good governance, and hurts the most vulnerable. The convention was a breakthrough because it committed the world’s leading exporting countries to prohibit bribery, thereby aiming to turn off the spigot on the supply-side of global corruption. Since its commencement, all 41 parties of the convention have passed laws on making foreign bribery a criminal offense. However, enforcement of the laws remains uneven, with some parties making more of an effort in enforcing the laws than others. Despite this, over 300 companies and individuals have been sanctioned under criminal proceedings for foreign bribery as of December 2011.[4]
Implementation and enforcement
Since the OECD has no authority of enforcing the OECD Anti-Bribery Convention in its members' countries, the implementation and enforcement of the convention is carried through by the member countries, and monitored by the OECD Working Group on Bribery [5] through a rigorous peer-review monitoring system, which goes through three stages [6] :
Every member country must provide the OECD Working Group on Bribery with reports on the implementation and enforcement of the three different phases of the implementation of the convention. To ensure continuous enforcement against foreign bribery within member countries, all parties have also had to provide follow-up reports on the different phases of implementation of the convention. In these follow-up reports, all parties account for the concrete steps they have taken to eradicate foreign bribery within their span of responsibility.[7]
Finland
Finland was ratified by the OECD Anti-Bribery Convention on December 10th 1998 and entered into the force of the Convention as of February 15th 1999. Finland released their Phase 1 report in July 1999, their Phase 2 report in May 2002 and Phase 3 report in October 2010. The follow-up report on Phase 2 was released in March 2006 and the follow-up on Phase 3 in January 2013.
In addition to passing anti-bribery legislature, Finland has also signed and been ratified by the following relevant international instruments in their effort to implement and enforce the OECD Anti-Bribery Convention[8] :
- European Council Criminal Law Convention on Corruption
- European Council Civil Law Convention on Corruption
- Additional Protocol on the European Council Criminal Law Convention on Corruption;
- Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime
- United Nations Convention against Transnational Organised Crime
- United Nations Convention against Corruption
Critique
The OECD Anti-Bribery Convention has received critique for being "too narrow" in its focus on bribery as a crime. The specific focus of the Convention is only on the "supply side" of corruption, leaving the "demand side" out of the equation. For instance, if a German coffee importing company resorted to bribing a Cuban official in order to obtain favorable advantages with custom duties, the offence in question would - according to the convention - be only that of the German company, regardless of the actions of the Cuban official.[9]
In contrast to the other big anti-bribery document, the United Nations Convention against Corruption, the OECD Anti-Bribery convention does not address all parties involved in any given bribery case. The UN convention from 2003 has a broader approach: In addition to including the demand side of bribery, it also takes into account other aspects, such as money laundry, asset recovery, international assistance and corruption prevention.
Future challenges and necessary steps
Because the Convention is a collective commitment to eradicate foreign bribery by all the parties, lack of consistent enforcement endangers the success of the Convention. As mentioned, all parties have not been equally effective with implementing and enforcing laws in accordance with the convention, and the main challenges for the OECD Anti-Bribery Convention will continue to be the enforcement of the laws prohibiting all forms of bribery of foreign public officials in international business transactions. Facing these challenges successfully requires the following main steps:
1. Continuation of rigorous follow-up monitoring.
2. High level advocacy directed to the political leaders of the governments where there is still little or no enforcement.
3. Adoption of the Convention by other major exporters, in particular by the four remaining G20 states China, India, Indonesia and Saudi Arabia. [3]
External links
OECD Anti-Bribery Convention
Ratification status of Convention
Editorial by Chair of the OECD Working Group on Bribery in International Business Transactions
OECD Working Group on Bribery
Country monitoring of the OECD Anti-Bribery Convention - Phase 1
Country monitoring of the OECD Anti-Bribery Convention - Phase 2
Country monitoring of the OECD Anti-Bribery Convention - Phase 3
Country reports on implementation of convention
References